NEOM Homes Most Sought After by Expats Living in Saudi Arabia

Saudi Arabia’s $500 billion project NEOM has been identified as the most preferred Giga project among expatriates living in Saudi Arabia, with 29% expressing a desire to purchase homes there, according to a survey conducted by global property consultancy Knight Frank.

Neom is a new urban area being built by Saudi Arabia in Tabuk region and was launched in 2017 by Saudi Arabia Prime Minister and Crown Prince H R H Mohamed Bin Salman. The site is at the northern tip of the Red Sea, due east of Egypt across the Gulf of Aqaba and south of Jordan and the total planned area of NEOM is 26,500 sq km.

According to the survey, which is part of Knight Frank’s inaugural Destination Saudi report, places Jeddah Central and King Salman Park as the second and third choices, with preferences standing at 15% and 8%, respectively.

The comprehensive survey involved 241 expatriates, aiming to gauge their real estate investment interests within the Kingdom.

A significant portion of the respondents (56%) have resided in Saudi Arabia for over a decade, and a majority (76%) are employed in the private sector. The interest among expatriates in NEOM’s specific areas is notably divided, with The Line attracting 42%, and Sindalah Island 19%.

Despite high interest, budget considerations could present a challenge for both expatriates and developers.

The survey indicated that 87% of expatriate respondents have a budget under $930,000 million, with 32% looking to spend below $200,000. This contrasts with the anticipated pricing for Giga project properties, which is expected to exceed $1 million, the survey said.

However, 41% of those with budgets under $1 million remain interested, suggesting a willingness to adjust their financial plans.

High Probability

The probability of making a residential purchase in a preferred Giga project remains high among expatriates, with 72% indicating they are likely to proceed with such investments. The average budget for an expat purchasing a home in a Giga project stands at $450 ,000, significantly higher than budgets allocated for properties elsewhere in the Kingdom.

Knight Frank’s analysis further revealed the substantial spending power within Riyadh’s expatriate community, estimated at $863 million, highlighting the potential capital ready to be invested in the Giga projects.

When considering the premiums expatriates are willing to pay for living in a Giga project over a non-Giga project, the average premium stood at 5.7%, with 32% of respondents willing to pay a 2.5-5% premium, the survey findings sowed.

High-earning expatriates, particularly those with monthly incomes over $10,665 showed readiness to pay premiums of 5%-7.5%, the survey findings added.`